Wholesalers share ideas about how to coax more sales out of contractors.



Wholesalers will get more business from their contractors by offering a variety of promotions, including some with purchase requirements. The idea is to get the customers into your counter sales area and put them in the mood to buy. You can entice them with a hot meal or the promise of a prize. Some wholesalers take the strategic approach of gaining the support of contractors' wives with special gifts or by featuring promotional rewards they can enjoy, such as certificates for groceries or restaurant dinners or vacation trips.

Lew Miller, president of Iowa Wholesale Supply Co., based in Marshalltown, Iowa, discussed the how-to's of contractor promotions at a special interest group meeting during the 2002 spring meeting of Omni Corporate Services Ltd. (See Lew Miller in action on next page.)

There are some general rules to follow. When possible, turn the promotional offer into a reward by stipulating a purchase requirement. The reward can be tied to purchases of a specific product or category of products. Set a minimum attainable purchase level. Offer a reward to contractors who surpass their purchase level from last year. Extend the offer over a couple of months, if warranted. A vacation trip promotion can run for a year. Carefully track each customer's sales and keep the customer informed of his progress toward achieving the reward. Make it clear that the customer not only has to make the purchases, but also has to pay his bills on time to qualify for the benefits. Also consider setting parameters on how much the contractor can earn.

"Figure 1% of sales as your promotion budget for the year," Miller says. "Make that your kitty. Then team up with your manufacturers to get part of that back in co-op funds. It's amazing how many people don't use co-op money.

"It doesn't hurt to ask," he continues. Even if the cooperative budget is running low, if you tell manufacturers you're doing a trip promotion, hosting a counter day or need funds for the Yellow Pages, they may give you free product or find extra credit, he says.

Once you have set aside the money, here are some creative ways to spend it:

Give stuff away. Hold an "everything free" day for just one day. "We have done it," Miller says. "Usually we will do it in the winter or during a slow time." At the end of the month in which it offers this promotion, Iowa Wholesale's computer draws one invoice from each customer who made a purchase on the selected date and issues a credit for that invoice.

Offer gift certificates for groceries or restaurant dinners. Iowa Wholesale Supply does a "Bring Home The Bacon" promotion in April or May in conjunction with Hy-Vee food stores. Qualifying contractors get a gift card that works just like cash in the supermarket. Sometimes the participating grocery store will pay the wholesaler a rebate. Manufacturers may offer co-op for this as well. A dinner certificate redeemable at a local restaurant is also an effective purchase incentive.

Take them on a vacation trip. Travel rewards offer multiple benefits. "We took 16 people to Cancun," Miller says. "I arranged where we would go for dinner and rented a van. I was the host. It's a lot of work and responsibility. When we take a trip like this, I am there at the airport. Each wife gets a personal gift. We present the wives with a rose at dinner. A fruit basket and a bottle of wine are delivered to each room." The contractors have to earn the trip. Send them a post card with a picture of the destination. The trip should include meals and accommodations. A manufacturer may be willing to sponsor a cocktail party or excursion during the trip. "It's a great way to become close and personal with your customers, not only with the contractor, but also with his wife," Miller says. He adds that he prefers to go along on the trips vs. awarding trip certificates. "I want to be with my customers and make sure everything is done right," he says.

Give away clothing. Manufacturers are likely to have co-op programs featuring clothing items such as jackets, shirts and caps bearing their logo. They can add the wholesaler's logo as well. The cost to the wholesaler is minimal and can be reimbursed by the purchase requirements. For example, Miller says, the jacket may cost the wholesaler $15 but he can require $1500 in purchases for the contractor to get it free. The contractor's perception of the jacket is worth much more than $15, he says.

Lunch with vendors. "Take a plumber a month," Miller says. "We provide lunch as a co-op with one of my vendors. I go to their shop. We feed them in 15 to 20 minutes, then the vendor gives a sales presentation." Treat the plumber's whole staff. Miller says he will do this to encourage customers who are not attaining their buying potential or as a thank you to good, loyal customers.

Hire a model for a counter day. Miller says one of his most successful counter day promotions was a co-op with a vendor in which they hired a model and she signed pictures for the contractors. On the other side of her photo was a list of products. The promotion included a bratwurst cook-out that ran from 11 a.m. to 2 p.m.

Bikini truck wash. This was suggested by one of the other wholesalers attending the meeting, who said it really draws contractors.

Hold an auction. Iowa Wholesale participates in an offsite auction once or twice a year. It's a good way to sell slow-movers and scratched or dented products, Miller says. Partnering with non-competing businesses that offer complementary products, like an electrical company, a rental center, a lumberyard or local businesses that sell paint and carpet, enhances the success of such an event.

Have a silent auction for a pallet of goods. Choose six to eight items, plus donated samples requested from selected vendors, and hold a silent auction for the whole pallet. Set a minimum price. "We sold the pallet for more than double the money on the good stuff," Miller says.

Send giftwrap to contractors' wives. One wholesaler said he sends a box of holiday giftwrap and bows to each of the wives of his top 50 contractor customers the week before Thanksgiving. It is done as a thank you to his most loyal customers.

Deliver snacks to the maintenance department of a major university. Another wholesaler said he buys a meat tray and crackers and delivers it to the maintenance department at a major university.

Offer free complementary goods with purchase. If the contractor buys a rough-in valve, give him free trim. Add a free disposal with purchase of a stainless steel sink or a free valve with a sump pump order.

Pay a rebate. One wholesaler said he offers contractors a 2% rebate at the end of the year. The check is sent from the manufacturer but has the wholesaler's name on it. The wholesaler and supplier each pay half toward the rebate.

Provide pick-up service for old water heaters. This worked to one wholesaler's advantage. After he picked them up from his customers, he made $6 to $7 per heater by selling them to a salvage yard.

Offer extended terms to good customers during slow periods. One wholesaler said he offers a deal to his best customers during the first quarter when sales slow down. He invites them to order air conditioners and furnaces and pay for them over an extended period. He computes their total purchases for January through March, then divides that figure by 10. The customer can pay that amount each of the next 10 months interest-free, but with no cash discount. The wholesaler does not discount his prices as much as at other times and he usually sets a minimum purchase requirement, such as $25,000.

Promotional opportunities also are available on the Internet, Miller says. Half of the wholesalers at his workshop said they either had a Web site or were working on one.

"You have to have the right host, the right server and the right search engine," Miller says. "We do a substantial amount of mail order business over the Internet. You don't have to be the low-ball price.

"We do a lot of business on E-bay," he continues. "We'll post up to a dozen items on E-bay and maybe three or four will sell. People will call with questions and we'll send them literature."

Faucets, sinks, shower rods, smokers and grills can sell well on the Internet, he says.

Trucks can also be a promotional tool. "You can use co-op money from your suppliers to get logos or a mural painted on your trucks," Miller says.

"Keep telling your customers about what you are doing," he says. Iowa Wholesale sends out promotional flyers paid for with cooperative dollars.

"Do something nobody expects you to do," Miller says. "What is your competition not doing? Meet or exceed your customers' expectations within reason. Today a wholesaler has to think like a retailer."